Canadian Securities Exchange CEO Richard Carleton appeared before the Standing Senate Committee on Banking, Commerce and the Economy in March 2026 to discuss the breakdown of the traditional IPO for small- and medium-sized companies and why widening retail access to public markets is central to fixing it.
By James Black, Vice President, Marketing and Communications, Canadian Securities Exchange · Published [date]
“The traditional IPO is dead, and it’s not coming back for small- and medium-sized companies.”
– Richard Carleton, CEO, Canadian Securities Exchange
Canada’s small-cap companies have faced one of the toughest capital-raising environments in years, with traditional initial public offerings (IPOs) scarce and the retail investors who once fuelled the junior markets being pushed to the sidelines. Invited to appear before the Standing Senate Committee on Banking, Commerce and the Economy (BANC) on March 12, 2026, CSE CEO Richard Carleton located the problem in the mechanics of the market itself: it stems, he argued, not from a shortage of ambition but rather from a structure that has stopped working for the companies it was built to serve.
Carleton’s remarks are part of a pivotal series of conversations about the function and future of Canada’s capital markets, driven by the BANC Standing Committee’s study of access to credit and capital markets for small- and medium-sized enterprises as the basis for growth and improved productivity in the Canadian economy. These conversations have included perspectives from private credit managers, technology founders, representatives from Canada’s securities regulators, the Canadian Bankers Association, other exchanges, and figures such as Jim Balsillie of the Council of Canadian Innovators and John Ruffolo of Maverix Private Equity.
Notably, a key point made by Carleton has formed one of the prominent themes to emerge thus far: Canadian companies can start here but struggle to scale here, too often selling early or moving abroad and taking ownership, jobs, and intellectual property with them.
The end of the traditional IPO
Asked by Senator Daryl Fridhandler about the barriers keeping ordinary investors out of the junior market, Carleton traced the decline of the traditional IPO to how companies now go public. Rather than launch a genuine IPO, they raise money privately from accredited and offshore investors, then file a non-offering prospectus to qualify for a listing. They reach the market with thinly held shares that can weaken price discovery, raise volatility, and make the next round harder to secure. The numbers bear it out: In 2025, the CSE handled five of the ten traditional IPOs completed in Canada, and the first three completed in the country in 2026 were all on the Exchange.
Losing the retail investor
If the IPO was the mechanism, retail investors were the fuel. Carleton reminded the committee that it was retail money, not institutions, that built many of Canada’s signature and emerging industries.
“We have built the mining industry in Canada with tremendous support from the retail sector. We saw the legal cannabis industry – in Canada and elsewhere – funded principally by the retail sector. More recently, the Blockchain, AI and Cryptocurrency sectors have been funded principally by the retail sector in Canada.”
That base is now, effectively, being cut off. Self-directed money is largely off limits to new offerings, and advisers face growing barriers to recommending smaller issuers. The result is a striking disconnect: The investors who built those industries can no longer back the next generation, so early-stage companies struggle to form, grow, or stay, and the industries that might follow never take shape.
A farm team for foreign capital
That friction on growth, for Carleton, is the real cost, and it is a concern the committee has heard often.
“One of my big concerns is we are creating a farm team for U.S. venture capital and private equity or trade sales.”
His prescription is specific: Widen retail access to public offerings and lower the regulatory and cost barriers around them, rather than pursue the other measures recently proposed.
Fragmentation and the cost of capital
The topic of provincial securities regulation drew an equally direct response. When asked by Senator Pierrette Ringuette whether the provinces were dismantling the barriers between them, Carleton said progress had been “spotty, slow, and not as effective as it ought to be.” That fragmentation of provincial securities rules, he argued, raises the cost of capital and complicates any offering that crosses provincial lines.
Any real solution must consider not just access but also the cost of capital. The companies most sensitive to it are the ones best positioned to drive Canada’s next wave of growth – the early-stage mining companies, and those at the frontier of AI, blockchain, and whatever comes next. For them, a lower cost of capital is the difference between scaling at home and selling abroad, and between wealth created here and wealth captured elsewhere. Lowering that cost for exactly these companies is what the CSE has built its business around, and where the Exchange has grown.
Carleton’s contribution to that conversation was a direct one. An important factor in improving the growth and productivity of the Canadian economy lies in widening access to the public markets, a door the CSE has spent more than two decades holding open.
The conversation on the future of public companies in Canada is also extending beyond Ottawa. The Canadian Public Company Study, a research initiative led by professors L. Daniel Wilson and J. Ari Pandes from the University of Calgary, is examining the same issue from the ground up: Why publicly listed operating companies are declining in Canada, and which innovations and reforms could reverse the trend and reinvigorate the country’s public markets. It is gathering the perspectives of the people closest to it – business decision-makers and capital market professionals.
Traction toward regulatory reform and policy innovation is growing. With the BANC Standing Committee’s final report now due October 31, 2026, that case for widening access forms part of a record that could help shape how Canadian capital markets function in the years ahead. Read the submissions shaping that work, and watch Richard Carleton’s full remarks, on the BANC Standing Committee’s record.
About the author
James Black is Vice President, Marketing and Communications at the Canadian Securities Exchange. He joined the CSE in 2009 and spent more than 16 years leading issuer-focused business development before taking on responsibility for the Exchange’s global marketing and communications strategy. Before the CSE, he supported national networking and thought leadership programming for angel investors at the National Angel Capital Organization. He holds a Bachelor of Commerce in Entrepreneurship and Marketing from Toronto Metropolitan University.